drbubb Posted September 17, 2016 Author Report Share Posted September 17, 2016 Higher rent is squeezing everyone, especially the middle Sept 16, 2016 Middle-income wages aren’t keeping up with rental costs. It’s getting more costly to rent. Rental costs remained high in August, continuing to pressure the budgets of most ordinary Americans. Rent was 3.8% higher than a year ago for the fourth month in a row, the Labor Department said Friday. That compares to the 2.4% growth in average hourly earnings. The booming cost of rent is concerning. It points to a market in which supply isn’t keeping up with surging demand and a reminder that Americans are uneasy about, or locked out of, homeownership. And the effects are just as troubling as the causes. Options and mobility are limited, and other expenses get squeezed out. The trend in higher rents has been consistent throughout the economic recovery, but monthly data can be choppy. Census data released earlier this week showed a more healthy economic picture than previously expected. Incomes rose 5.2% between 2014 and 2015 and poverty slid. Census also released some data from its 2015 American Community Survey this week. One promising trend in that data was regional income convergence, Trulia economist Ralph McLaughlin wrote in a research note. Convergence is when income growth in lower income areas is larger than in high income areas. Incomes in the lowest-income metros grew 5.3%, faster than incomes in all others. They also grew substantially faster than housing prices, which were up 3.1%, and slightly outpaced rental costs, which were up 5.1%. But for higher- and middle- income people, rental costs grew at about double the pace of incomes. Metro type % change in income % change in house prices % change in rent Lowest income 5.3% 3.1% 5.1% Lower income 3.3% 4.6% 6.8% Middle income 4.2% 4.6% 6.7% Higher income 3.0% 4.5% 6.6% Highest income 3.4% 2.7% 7.2% Link to comment Share on other sites More sharing options...
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